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(c) Upon not less than ten (10) banking days irrevocable written notice received by the Bank fromthe Borrower, the Borrower may prepay the Loan in full or in part only on the first (1st) dayof the calendar month that is so noted in such notice. Any such noticedprepayment shall be unconditionally due on such stated date for such prepayment inthe notice. Such prepayment must be accompanied with (i) the payment of anytermination, reinvestment, or breakage costs incurred by the Bank if suchprepayment is not received on the first (1st) day of the calendar month that isnoted in such prepayment notice; and (ii) a prepayment fee as follows:     Date of Prepayment Percentage of Prepaid Amount  Prior to March 31, 2010  2.00%Prior to March 31, 2011  1.00%Prior to March 31, 2012  0.50%Provided that, if the prepayment is a prepayment in full and made in connection with either:(A) a refinancing transaction, the proceeds of which are used toboth (x) repay the Loan and all other amounts payable to the Bank infull, and (y) to finance material improvements to the real propertyand improvements thereon comprising the Collateral (as definedbelow); or(B) a new market tax credit financing transaction, the proceeds ofwhich are used to repay the Loan and all other amounts payable tothe Bank in full;then a prepayment fee as follows:     Date of Prepayment Percentage of Prepaid Amount  Prior to March 31, 2010  1.00%Prior to March 31, 2011  0.50%Prior to March 31, 2012  0.25%Provided further that, if the Bank is either the only lender or is the primary lender of anyfinancing covered by clause (A) of the preceding sentence, then no prepayment fee will berequired.Each such prepayment will be applied (A) first, to the payment of any suchtermination, reinvestment, or breakage fee; (B) second, to the Prepayment Fee; andthen; (C) third, to the most remote payment of principal due under this Agreement.The Borrower shall also pay to the Bank, in addition to any late fee or default, interest onany noticed prepayment that is not timely made, all costs, expenses, fees and lossesincurred by Bank as a result of such failure, including any termination, reinvestment orbreakage fee.
 
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1.4 Interest Rate.(a) The interest rate on the unpaid amount of the Loan shall be a rate per year equal to the BBALIBOR Rate (Adjusted Periodically), plus three hundred fifty (350) basis points.(b) The interest rate will be adjusted on the first (1st) day of every calendar month (the“Adjustment Date”) and remain fixed until the next Adjustment Date. If the AdjustmentDate in any particular month would otherwise fall on a day that is not a banking day then, atthe Bank’s option, the Adjustment Date for that particular calendar month will be the firstbanking day immediately following thereafter.(c) The BBA LIBOR Rate (Adjusted Periodically) is a rate of interest equal to the rate per annumequal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published byReuters (or another commercially available source providing quotations of BBA LIBOR asselected by the Bank from time to time) as determined for each Adjustment Date atapproximately 11:00 a.m. London time two (2) London Banking Days prior to the Adjustment Date,for U.S. Dollar deposits (for delivery on the first day of such interest period) with a termof one month, as adjusted from time to time in the Bank’s sole discretion for reserverequirements, deposit insurance assessment rates and other regulatory costs. If such rate isnot available at such time for any reason or if the Bank determines in its sole discretionthat such rate no longer accurately reflects its cost of funds, then the rate for thatinterest period will be determined by such alternate method as reasonably selected by the Bankprovided that the effect of such alternative method is to provide for an interest rate that isgenerally comparable in market performance and fluctuation as the BBA LIBOR immediately priorto such rate not being available or not reflecting the cost of funds. A “London BankingDay” is a day on which banks in London are open for business and dealing in offshoredollars.**2.** **FEES AND EXPENSES**2.1 Fees.(a) Loan Fee. The Borrower agrees to pay a loan fee in the amount of One Hundred TwentyEight Thousand Three Hundred Seventy Five and no/100 Dollars ($128,375.00). This loan feeshall be paid by the Borrower on the date of this Agreement and shall be fully paid andnon-refundable upon receipt by the Bank.(b) Late Fee. The Borrower agrees to pay a late fee in an amount equal to four percent(4%) of the amount of any delinquent payment of principal or interest that is more than ten(10) calendar days late. The imposition and payment of a late fee shall not constitute awaiver of the Bank’s rights with respect to the default. This fee shall be in addition to theaccrual of interest at the default rate of interest pursuant to Section 4.6 below.
 
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2.2 Expenses.The Borrower agrees to repay the Bank within ten (10) days after request or invoice for allexpenses and costs incurred by the Bank in connection with the Loan, which may include, butare not limited to, filing, recording and search fees, appraisal fees, survey fees, title reportfees, title insurance premiums, and documentation fees.2.3 Reimbursement of Costs and Expenses.(a) The Borrower agrees to also reimburse the Bank for any costs or expenses it incurs in thepreparation of this Agreement, any agreement, document or instrument required by thisAgreement, including, without limitation, the Deed of Trust, as defined in Article 3below and any agreement, document or instrument required pursuant to Article 5 below.Expenses shall include, but are not limited to, reasonable attorneys’ fees and costs,including any allocated costs of the Bank’s in-house counsel to the extent permitted byapplicable law.(b) The Borrower agrees to also reimburse the Bank for the cost and expense of periodic fieldexaminations of the Collateral, and appraisals of the Collateral, at such intervals as theBank may reasonably require; provided, however, that so long as there is no Event of Default,Borrower shall not be required to pay for more than one (1) appraisal each calendar yearfollowing the disbursement of the Loan. The actions described in this paragraph shallinclude, without limitation, the actions taken pursuant to Section 7.23 below, and maybe performed by employees of the Bank or by independent appraisers.**3.** **DEED OF TRUST AND COLLATERAL**The Borrower’s obligations to the Bank under this Agreement will be secured by the property rightsand interests covered by the following (the “Collateral”):A Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated asof April 27, 2009 (the “Deed of Trust”) which shall cover the approximately89.6 acres of land located at 3300 West Camelback Road, Phoenix, Arizona 85017-3030and the other property, rights and interest described in the Deed of Trust.The Deed of Trust and any other document executed at any time by the Borrower to secure the Loanare collectively, the “Collateral Documents”.**4.** **DISBURSEMENTS, PAYMENTS AND COSTS**4.1 Disbursements and Payments.(a) Each payment by the Borrower will be made in U.S. Dollars and immediately available funds bydebit to a deposit account, as described in this Agreement or otherwise authorized by theBorrower. For payments not made by direct debit, payments will be made by mail to the addressshown on the Borrower’s statement or at one of the Bank’s banking centers in Phoenix, Arizona,or at such other banking center designated by the Bank, or by such other method as may bepermitted or directed by the Bank.(b) The Bank may honor instructions for repayments or prepayments given by any one of theindividuals authorized to sign this Loan Agreement or the Deed of Trust on behalf of theBorrower, or any other individual designated in a writing delivered to the Bank by any oneof such authorized signers (each an “Authorized Individual”).
 
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(c) For any payment under this Agreement made by debit to a deposit account, the Borrower willmaintain sufficient immediately available funds in the deposit account to cover such debit.If there are insufficient immediately available funds in the deposit account on the date theBank enters any such debit authorized by this Agreement, the Bank may reverse the debit.(d) The disbursement of the Loan by the Bank and each payment by the Borrower will be evidencedby records kept by the Bank, and shall be conclusive, absent manifest error. In addition, theBank may, at its discretion, require the Borrower to sign a promissory note to furtherevidence the Loan, and the Borrower’s obligation to repay the Loan, plus interest.(e) Not later than five (5) calendar days prior to the date each payment of principal andinterest or any fees, costs or expenses from the Borrower becomes due (each a “DueDate”), the Bank will mail to the Borrower a statement of the amounts that will be due onthe stated Due Date (the “Billed Amount”). The due date for any payment by Borrowershall not be delayed or postponed if for any reason (A) Bank does not timely mail any suchstatement; or (B) Borrower does not timely receive such statement. The calculations in eachsuch billing statement will be made on the assumption that no payments will be made betweenthe date of the billing statement and the Due Date, and that there will be no changes in theapplicable interest rate. If the Billed Amount differs from the actual amount due on thestated Due Date (the “Accrued Amount”), the discrepancy will be treated as follows: (i) If the Billed Amount is less than the Accrued Amount, the Billed Amount for thefollowing Due Date will be increased by the amount of the discrepancy. The Borrowerwill not be in default by reason of any such discrepancy. (ii) If the Billed Amount is more than the Accrued Amount, the Billed Amount for thefollowing Due Date will be decreased by the amount of the discrepancy.  Regardless of any such discrepancy, interest will continue to accruebased on the actual amount of principal outstanding withoutcompounding. Interest shall also accrue on any fees, costs orexpenses that are not paid by the Borrower upon presentment of theamount to the Borrower. The Bank will not pay the Borrower intereston any overpayment. 4.2 Telephone and Telefax Authorization.(a) The Bank may honor telephone, telefax or e-mail instructions for repayments or prepaymentsgiven, or purported to be given, by any one of the Authorized Individuals.(b) The Borrower will fully indemnify and hold the Bank harmless from all liability, loss, andcosts in connection with any act resulting from telephone, telefax or e-mail instructions theBank reasonably believes are made by any Authorized Individual. Thissection will survive this Agreement’stermination, and will benefit the Bankand its officers, employees, andagents.
 
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4.3 Direct Debit.(a) The Borrower agrees that on each Due Date the Bank will debit the Billed Amount from one ofBorrower’s accounts with the Bank as designated in writing by the Borrower (the“Designated Account”).4.4 Banking Days.Unless otherwise provided in this Agreement, a banking day is a day other than a Saturday,Sunday or other day on which commercial banks are authorized to close, or are in fact closed, inthe State of Arizona, and, if such day relates to amounts bearing interest at an offshore rate (ifany), means any such day on which dealings in dollar deposits are conducted among banks in theoffshore dollar interbank market. All payments and disbursements which would be due on a day whichis not a banking day will be due on the next banking day. All payments received on a day which isnot a banking day will be applied to the credit on the next banking day.4.5 Interest Calculation.Except as otherwise stated in this Agreement, all interest and fees, if any, will be computedon the basis of a 360-day year and the actual number of days elapsed. This results in moreinterest or a higher fee than if a 365-day year is used. Installments of principal which are notpaid when due under this Agreement shall continue to bear interest until paid.4.6 Default Rate.Following the occurrence of an Event of Default or after maturity of or after judgment hasbeen rendered on any obligation under this Agreement, all amounts outstanding under this Agreement,including any (i) interest; or (ii) fees, costs or expenses which are not paid within two (2)business days after the date when due, will at the option of the Bank bear interest at a rate whichis six hundred (600) basis points higher than the Interest Rate from such date until the datereceived by Bank. This may result in the compounding of interest. This will not constitute awaiver of any default and shall be in addition to the late fee pursuant to Section 2.1(b).**5.** **CONDITIONS**Before the Bank is required to make the Loan pursuant to this Agreement, it must receive anydocuments and other items it may reasonably require, in form and content acceptable to the Bank,including any items specifically listed below.5.1 Authorizations.Evidence that the execution, delivery and performance by the Borrower of this Agreement andany instrument or agreement required under this Agreement have been duly authorized.
 
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5.2 Governing Documents.A copy of the Borrower’s organizational and operating documents.5.3 Deed of Trust.Signed, acknowledged and properly recorded (which recording may be contemporaneous with the closingof the Loan pursuant to an escrow to close the Loan) original Deed of Trust.5.4 Title Insurance.An ALTA lender’s title insurance policy (on a form acceptable to the Bank and from a titlecompany acceptable to the Bank), for Twenty Five Million Six Hundred Seventy Five and no/100Dollars ($25,675,000.00), insuring the Bank’s lien pursuant to the Deed of Trust, with only suchexceptions and exclusions as may be approved by the Bank and together with such endorsements as theBank may require (the “Title Policy”).5.5 Payment of Fees, Costs and Expenses.Payment of all fees and other amounts due and owing to the Bank, including without limitationpayment of all accrued and unpaid expenses incurred by the Bank as required by the Section2.3 entitled “Reimbursement of Costs and Expenses.” The payment of all ReimbursementCosts accruing prior to the date of this Agreement shall be set forth in the Closing Statementreferenced in Section 7.1 and shall be paid out of the proceeds of the Loan pursuantthereto.5.6 Good Standing.Certificates of good standing for the Borrower from the State of Delaware and the State of Arizona.5.7 Legal Opinion.A written opinion from the Borrower’s legal counsel, covering such matters as valid corporateexistence, authority to borrow, confirmation that entering into this Agreement will not cause aviolation of any other lending agreement, and any other matters the Bank may require. The legalcounsel and the terms of the opinion must be acceptable to the Bank.5.8 Insurance.Evidence of insurance coverage, as required pursuant to either (i) Section 7.14 of thisAgreement or (ii) the Collateral Documents.5.9 Environmental Information. (i) Phase 1. An environmental Phase 1 site assessment prepared by aqualified third party consultant approved by the Bank concerning any potential toxic orhazardous condition with respect to the real property collateral, together with acertification signed by the Borrower regarding the environmental informationprovided to the Bank (the “Phase 1”); and
 
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 (ii) Lead Safe. Borrower shall deliver to the Bank documentation evidencingthat the property covered by the Deed of Trust is operated in a lead safe manner; and (iii) Asbestos Plan. Borrower shall deliver to the Bank a copy of theBorrower’s Asbestos Operations and Maintenance Plan and the Bank shall have determinedsuch Plan to be acceptable.5.10 Survey. Delivery of an Aerial Survey covering the real property covered by the Deed of Trust to the Bankand the Title Company.5.11 Other Required Documentation.(a) Fully executed Purchase and Sale Agreement and all related documents in connection with thetransaction (the “Purchase Transaction”) among Borrower, on the one hand, and SpiritMaster Funding, LLC and Spirit Management Company (collectively, “Spirit”), on theother hand (the “Purchase and Sale Agreement”) regarding the real property covered bythe Deed of Trust, including, without limitation, the proper recording of a Warranty Deed infavor of the Borrower for the real property covered by the Deed of Trust.(b) All documents and certificates set forth on the Closing Checklist delivered to Borrower fromthe legal counsel of the Bank regarding the Loan (the “Closing Checklist”).(c) All documents and certificates required by the Title Insurance Company as a condition to itsissuance of the Title Policy, and all endorsements thereto.(d) An Appraisal, by an MAI Appraiser selected and retained by the Bank, of the real propertycovered by the Deed of Trust in a form acceptable to the Bank, and disclosing a currentappraised value of not less than Thirty Nine Million Five Hundred Thousand and no/100 Dollars($39,500,000.00).**6.** **REPRESENTATIONS AND WARRANTIES**When the Borrower signs this Agreement, and until the Bank is repaid in full, the Borrower makesthe following representations and warranties as of and on each day the Loan remains outstanding.6.1 Formation.Borrower is duly formed and validly existing under the laws of the State of Delaware.
 
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6.2 Authorization.This Agreement, and any instrument or agreement required hereunder, are within the Borrower’scorporate powers, have been duly authorized, and do not conflict with any of its organizational orgoverning documents.6.3 Enforceable Agreement and Deed of Trust.This Agreement and the Collateral Documents are each a legal, valid and binding agreement of theBorrower, enforceable against the Borrower in accordance with their respective terms. In addition,any instrument or agreement required under this Agreement, when executed and delivered, will besimilarly legal, valid, binding and enforceable.6.4 Good Standing.In each state in which the Borrower does business, it is properly licensed, in good standing, and,where required, in compliance with fictitious name statutes, except where such failure to be solicensed, in good standing and in compliance has not and would not reasonably be expected to have amaterial adverse effect on the Borrower or its business.6.5 No Conflicts.This Agreement does not conflict with any law, agreement, or obligation by which the Borrower isbound.6.6 Financial Information.All financial and other information that has been or will be supplied to the Bank is sufficientlycomplete to give the Bank accurate and complete knowledge, in all material respects, of theBorrower’s financial condition, including all material contingent liabilities. Since the date ofthe most recent financial statement provided to the Bank, there has been no material adverse changein the business condition (financial or otherwise), operations, properties or prospects of theBorrower.
 
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6.7 Lawsuits.As of the date of this Agreement, there is no lawsuit, tax claim or other dispute pending, overtlythreatened in writing or, to Borrower’s actual knowledge, otherwise threatened against the Borrower(or any of the Borrower’s property) which, if lost, would materially impair the Borrower’sfinancial condition or ability to repay the Loan, except as have been disclosed in writing to theBank or as have otherwise been disclosed by the Borrower in any periodic report or other filingmade with the Securities and Exchange Commission (the “SEC”) under the Securities Act of1933, as amended (the “Securities Act”) or the Securities Exchange Act of 1934, as amended(the “Exchange Act”) (collectively, the “SEC Reports”), or if occurring after thedate of this Agreement, is promptly disclosed to the Bank pursuant to Section 7.13.6.8 Collateral.As of the time the Deed of Trust is recorded with the Recorder of Maricopa County, Arizona, theCollateral is owned by the Borrower free of any title defects or any liens, except those which aredisclosed in the Title Policy referenced in Section 5.4 above or by a UCC financingstatement search.6.9 Permits, Franchises.The Borrower possesses all permits, memberships, franchises, contracts and licenses required andall trademark rights, trade name rights, patent rights, copyrights, and fictitious name rightsnecessary to enable it to conduct the business in which it is now engaged except to the extentBorrower’s failure to possess such permits or other rights has not resulted or would not reasonablybe expected to result in a material adverse effect on Borrower or its business.6.10 Other Obligations.As of the date of this Agreement, the Borrower is not in default on any obligation for borrowedmoney, any purchase money obligation or any other material lease, commitment, contract, instrumentor obligation.6.11 Tax Matters.The Borrower has no knowledge of any pending assessments or adjustments in an amount exceeding OneHundred Thousand Dollars and no/100 Dollars ($100,000.00) of its income tax for any year and alltaxes due have been paid, except as have been disclosed in writing to the Bank, or if the Borrowerobtains knowledge of such assessment or adjustment after the date of this Agreement, except as ispromptly disclosed to the Bank in writing.
 
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6.12 No Event of Default.There is no event which is, or with notice or lapse of time or both would be, an Event of Defaultunder this Agreement or any of the Collateral Documents.6.13 Insurance.The Borrower has obtained, and maintains in effect, the insurance coverage required in any of (i)Section 7.14 of this Agreement, or (ii) pursuant to the Collateral Documents.6.14 ERISA Plans.(a) Each Plan (other than a multiemployer plan) is in compliance in all material respects withthe applicable provisions of ERISA, the Code and other federal or state law. Each Plan hasreceived a favorable determination letter from the IRS and to the best knowledge of theBorrower, nothing has occurred which would cause the loss of such qualification. The Borrowerhas fulfilled its obligations, if any, under the minimum funding standards of ERISA and theCode with respect to each Plan, and has not incurred any liability with respect to any Planunder Title IV of ERISA.(b) There are no claims, lawsuits or actions (including by any governmental authority), and therehas been no prohibited transaction or violation of the fiduciary responsibility rules, withrespect to any Plan which has resulted or could reasonably be expected to result in a materialadverse effect on the Borrower or its business.(c) With respect to any Plan subject to Title IV of ERISA: (i) No reportable event has occurred under Section 4043(c) of ERISA for which thePBGC requires 30-day notice. (ii) No action by the Borrower or any ERISA Affiliate to terminate or withdraw fromany Plan has been taken and no notice of intent to terminate a Plan has been filedunder Section 4041 of ERISA. (iii) No termination proceeding has been commenced with respect to a Plan underSection 4042 of ERISA, and no event has occurred or condition exists which mightconstitute grounds for the commencement of such a proceeding.(d) The following terms have the meanings indicated for purposes of this Agreement: (i) “Code” means the Internal Revenue Code of 1986, as amended from time totime. (ii) “ERISA” means the Employee Retirement Income Security Act of 1974, asamended from time to time. (iii) “ERISA Affiliate” means any trade or business (whether or notincorporated) under common control with the Borrower within the meaning of Section414(b) or (c) of the Code.
 
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 (iv) “PBGC” means the Pension Benefit Guaranty Corporation.  (v) “Plan” means a pension, profit-sharing, or stock bonus plan intended toqualify under Section 401(a) of the Code, maintained or contributed to by the Borroweror any ERISA Affiliate, including any multiemployer plan within the meaning of Section4001(a)(3) of ERISA.6.15 Location of Borrower.As of the date of this Agreement, the place of business of the Borrower and its chief executiveoffice are each located at 3300 West Camelback Road, Phoenix, Arizona 85017-3030.6.16 Closing Checklist.The Borrower’s Survey Certificate listed on the Closing Checklist and delivered to the Bank is trueand correct in all material respects.**7.** **COVENANTS**The Borrower agrees that until the Bank is repaid in full:7.1 Use of Proceeds.To use and apply the proceeds of the Loan only according to the Closing Statement dated April 27,2009 (the “Closing Statement”) in connection with the closing of the Purchase Transaction.7.2 Financial Information.To provide the following financial statements and other information; provided, that for so long asthe Borrower is required to file SEC Reports, the Borrower shall be deemed to have satisfied itsobligation to provide such financial statements and other information to the extent such financialstatements and other information are filed by the Borrower on the SEC’s EDGAR filing system and acopy of each such filing is delivered to the Bank within three (3) calendar days of such filing.(a) Copies of each Form 10-K Annual Report for Borrower filed with the SEC. If the Borrower doesnot timely file, or is not required to file with the SEC, a Form 10-K Annual Report forBorrower for any fiscal year, then, within ninety (90) days of each fiscal year end of theBorrower, the Borrower shall provide to Bank the annual financial statements of Borrower,certified and dated by an authorized financial officer. The financial statements deliveredseparately or included in such Form 10-K Annual Reports must be (i) audited by a CertifiedPublic Accountant acceptable to the Bank; (ii) prepared on a consolidated basis (ifapplicable); and (iii) include a balance sheet, statement of income and statement of cashflow.
 
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(b) Copies of each Form 10-Q Quarterly Report for Borrower filed with the SEC. If the Borrowerdoes not timely file, or is not required to file with the SEC, a Form 10-Q Quarterly Reportfor Borrower for any fiscal quarter, then, within sixty (60) days of eachfiscal quarter (other than the fiscal quarter that ends with the fiscal year) the Borrowershall provide to Bank the quarterly financial statements of Borrower, certified and dated byan authorized financial officer. The financial statements delivered separately or includedin such Form 10-Q Quarterly Report must be, (i) certified and dated by an authorizedfinancial officer; (ii) prepared on a consolidated basis (if applicable); and (iii) includea balance sheet, statement of income and statement of cash flow.(c) Copies of each Form 8-K Current Report for Borrower filed with the SEC.(d) Promptly, upon sending or receipt, copies of any management letters and correspondencerelating to management letters, sent or received by the Borrower to or from the Borrower’sauditor. If no management letter is prepared, the Bank may, in its discretion, request aletter from such auditor stating that no deficiencies were noted that would otherwise beaddressed in a management letter.(e) Consolidated Financial Projections covering a three (3) year time period and specifying theassumptions used in creating the projections (the “Consolidated FinancialProjections”). The Consolidated Financial Projections shall be provided to the Bank noless often than annually, and within seventy-five (75) days after the end of each fiscal year.(f) Promptly upon the Bank’s request, such other books, records, statements, lists of propertyand accounts, budgets, forecasts, pipeline reports or other reports as the Bank may reasonablyrequest.(g) Within sixty (60) days of the end of each fiscal quarter (other than a fiscal quarter thatends on last day of the fiscal year), a compliance certificate of the Borrower, signed by anauthorized financial officer in the form of Exhibit 7.2(g), which shall include,without limitation, (i) the information and computations (in sufficient detail) to establishcompliance with the financial covenants set forth in Sections 7.3, 7.4, and7.5 at the end of the period covered by the financial statements then being furnishedfor such fiscal quarter, and (ii) a statement whether there existed as of the date of eithersuch financial statements or the date of the certificate, any default under this Agreement,and if any such default exists, specifying the nature thereof and the action the Borrower istaking and proposes to take with respect thereto (the “Quarterly ComplianceCertificate”). The form or delivery of any Quarterly Compliance Certificate does notchange the terms of any financial or other covenant contained in this Agreement.(h) Within ninety (90) days of the end of each fiscal year, a compliance certificate of theBorrower, signed by an authorized financial officer in the form of Exhibit 7.2(h),which shall include, without limitation, (i) the information and computations (in sufficientdetail) to establish compliance with the financial covenants set forth in Sections7.3, 7.4, and 7.5 at the end of the period covered by the financialstatements then being furnished for such fiscal year, (ii) the information to establishcompliance with the Educational Covenants contained herein, and (iii) a statement whetherthere existed as of the date of such financial statements and whether there exists as of thedate of the certificate, any default under this Agreement, and if any such default exists,specifying the nature thereofand the action the Borrower is taking and proposes to take with respect thereto (the“Annual Compliance Certificate”). The form or delivery of any Annual ComplianceCertificate does not change the terms of any financial or other covenant contained in thisAgreement.
 
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(i) Not later than the earlier of (A) June 30 of each year, or (B) upon the filing with the DOEthereof, a copy of the Borrower’s most recent Title IV Compliance Audit (as such term isdefined by the DOE).7.3 Funded Debt to Adjusted EBITDA Ratio.To maintain on a consolidated basis a ratio of Funded Debt to Adjusted EBITDA as of the end of eachfiscal quarter and each fiscal year not exceeding as follows:     For all Times During the Following Period of Time Ratio  Closing of Loan — December 30, 2009  2.00:1.00 December 31, 2009 — December 30, 2010  1.75:1.00 All times from and after December 31, 2010  1.50:1.00 “Funded Debt” means all outstanding liabilities for borrowed money and otherinterest-bearing liabilities, including current and long term debt, less the non-current portion ofSubordinated Liabilities (as defined in Section 7.5 below).“Adjusted EBITDA” means net income, less income or plus loss from discontinued operationsand extraordinary items, plus income taxes, plus interest expense, plus depreciation, depletion,and amortization, as adjusted for (i) royalty payments incurred pursuant to an agreement with theBorrower’s former owner that has been terminated as of April 15, 2008, as disclosed in the SECReports; and (ii) non-cash share based compensation. This ratio will be calculated at the end ofeach reporting period for which the Bank requires financial statements, using the results of thetwelve-month period ending with that reporting period.7.4 Basic Fixed Charge Coverage Ratio.To maintain on a consolidated basis a Basic Fixed Charge Coverage Ratio as of the end of eachfiscal quarter and each fiscal year of at least 1.50:1.00.“Basic Fixed Charge Coverage Ratio” means the ratio of (a) the sum of net income plus (i)royalty payments incurred pursuant to an agreement with the Borrower’s former owner that has beenterminated as of April 15, 2008, as disclosed in the SEC Reports; (ii) non-cash share basedcompensation; and (iii) agreed upon, non-cash charges or non-recurring charges, plus interestexpense, and rent expense, to (b) the sum of interest expense, rent expense, the current portion oflong term debt, the current portion of capitalized lease obligations and dividends (but notincluding the special distribution made to the stockholders of Borrower in connection with theinitial public offering of Borrower in November 2008).
 
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This ratio will be calculated at the end of each reporting period for which the Bank requiresfinancial statements, using the results of the twelve-month period ending with that reportingperiod. The current portion of long-term liabilities will be measured as of the date of eachcalculation.7.5 Tangible Net Worth.To maintain on a consolidated basis Tangible Net Worth as of the end of each fiscal quarter andeach fiscal year in an amount equal to at least (i) Thirty One Million Dollars and no/100 Dollars($31,000,000.00); plus (ii) 70% of the Borrower’s net income for each fiscal quartercommencing with fiscal quarter that ended as of March 31, 2009 and each fiscal quarter thereafter(without reduction for any net loss for any fiscal quarter).“Tangible Net Worth” means the value of total assets including pre-paid royalty payments,leaseholds and leasehold improvements, and reserves against assets but excluding goodwill, patents,trademarks, trade names, organization expense, unamortized debt discount and expense, capitalizedor deferred research and development costs, deferred marketing expenses, and other likeintangibles, and monies due from affiliates, officers, directors, employees, shareholders, membersor managers) *less* total liabilities, including but not limited to accrued and deferredincome taxes, but excluding the non-current portion of Subordinated Liabilities.“Subordinated Liabilities” means liabilities subordinated to the Borrower’s obligations tothe Bank in a manner acceptable to the Bank in its sole discretion.7.6 [Intentionally Blank].7.7 Other Debts.Not to have outstanding or incur any direct or contingent liabilities or lease obligations (otherthan those to the Bank), or become liable for the liabilities of others, without the Bank’s writtenconsent. This does not prohibit:(a) Acquiring goods, supplies, or merchandise on normal trade credit.(b) Becoming and remaining liable with respect to subordinated indebtedness, the terms of suchindebtedness and the subordination thereof are reasonably acceptable to Bank and the maturitydate of which is at least one (1) year later than the Maturity Date.(c) Endorsing negotiable instruments received in the usual course of business.(d) Obtaining surety bonds in the usual course of business.(e) Liabilities, lines of credit and leases in existence on the date of this Agreement asdisclosed in writing to the Bank or in the Borrower’s SEC Reports.(f) Additional debts and lease obligations for business purposes which are not covered by (a)through (e) above, and which do not exceed a total aggregate principal amount of Ten Millionand no/100 Dollars ($10,000,000.00) outstanding at any one time.
 
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7.8 Other Liens.Not to create, assume, or allow any security interest or lien (including judicial liens) onproperty the Borrower now or later owns, except:(a) Liens and security interests in favor of the Bank.(b) Liens for taxes not yet due.(c) Liens outstanding on the date of this Agreement disclosed in writing to the Bank.(d) Purchase money security interests outstanding on the date of this Agreement, and additionalpurchase money security interests in assets acquired after the date of this Agreement, orliens on any asset existing at the time of acquisition of such asset by the Borrower, or liensto secure any indebtedness permitted hereby incurred by the Borrower at the time of or withinninety (90) days after the acquisition of such asset, which indebtedness is incurred for thepurpose of financing all or any part of the purchase price thereof; provided that the totalprincipal amount of the debts or indebtedness secured by the liens covered by thisSubsection 7.8(d) shall not exceed Ten Million and no/100 Dollars ($10,000,000.00) atany one time.(e) Statutory liens of landlords, liens of collecting banks under the UCC on items in the courseof collection, statutory liens and rights of set-off of banks, statutory liens of carriers,warehousemen, mechanics, repairmen, workmen and materialmen, and other liens imposed by law,in each case incurred in the ordinary course of business (i) for amounts not yet overdue or(ii) for amounts that are overdue and that (in the case of any such amounts overdue for aperiod in excess of five (5) days) are being contested in good faith by appropriateproceedings, so long as such reserves or other appropriate provisions, if any, as shall berequired by GAAP shall have been made for any such contested amounts.(f) Deposits made in the ordinary course of business in connection with workers’ compensation,unemployment insurance and other types of social security, or to secure the performance ofstatutory obligations, bids, surety and appeal bonds, leases, government contracts,performance bonds, trade contracts, and other similar obligations (exclusive of obligationsfor the payment of borrowed money).(g) Licenses (with respect to intellectual property and other property), leases or subleasesgranted to third parties not interfering in any material respect with ordinary conduct of thebusiness of Borrower consistent with past and anticipated practices.(h) Easements, rights-of-way, restrictions, encroachments, and other minor defects orirregularities in title, in each case which do not and will not (i) interfere in any materialrespect with the ordinary conduct of the business of the Borrower; or (ii) adversely affectthe value of the Collateral in any material respect.
 
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(i) Any (i) interest or title of a lessor or sublessor under any lease not prohibited by thisAgreement, (ii) lien or restriction that the interest or title of such lessor or sublessor maybe subject to, or (iii) subordination of the interest of the lessee or sublessee under suchlease to any lien or restriction referred to in the preceding clause (ii), so long as theholder of such lien or restriction agrees to recognize the rights of such lessee orsublessee under such lease.(j) Liens arising from filing UCC financing statements relating solely to leases not prohibitedby this Agreement.(k) Liens in favor of customs and revenue authorities arising as a matter of law to securepayment of customs duties in connection with the importation of goods.(l) Liens incurred in favor of insurance companies (or their financing affiliates) in connectionwith the financing of insurance premiums in the ordinary course of business.(m) Any zoning or similar law or right reserved to or vested in any government authority tocontrol or regulate the use of any real property.7.9 Maintenance of Assets.(a) Not to sell, assign, lease, transfer or otherwise dispose of any part of the Borrower’sbusiness or the Borrower’s assets except in the ordinary course of the Borrower’s business,and in no case in an aggregate amount exceeding Five Million and no/100 Dollars($5,000,000.00) in any fiscal year.(b) Not to sell, assign, lease, transfer or otherwise dispose of any assets for less than fairmarket value, or enter into any agreement to do so.(c) Not to enter into any sale and leaseback agreement covering any of its fixed assets.(d) To maintain and preserve all material rights, privileges, and franchises of the Borrower.(e) To make any repairs, renewals, or replacements to keep the Collateral in good workingcondition.7.10 Investments.Not to have any existing, or make any new, investments in any individual or entity, or make anycapital contributions or other transfers of assets to any individual or entity, except for:(a) Existing investments disclosed to the Bank in writing. (b) Investments in the Borrower’s current subsidiaries.
 
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(c) Investments consistent with the Borrower’s Investment Policy as of the date of thisAgreement, a copy of which is attached hereto as Exhibit 7.10, as prepared by theController and for purposes of this Section 7.10, any changes thereto that areapproved by the Board of Directors and CFO from time to time with the consent of the Bank,whichconsent will not be unreasonably withheld, which may include investments in any of thefollowing: (i) certificates of deposit; (ii) U.S. treasury bills and other obligations of the federal government; and (iii) readily marketable securities (including commercial paper, but excludingrestricted stock and stock subject to the provisions of Rule 144 of the Securities andExchange Commission).7.11 Loans to Officers or Affiliates.Not to make any loans, advances or other extensions of credit (including extensions of credit inthe nature of accounts receivable or notes receivable arising from the sale or lease of goods orservices) to any of the Borrower’s executives, officers or directors (or any relatives of any ofthe foregoing), or to any affiliated entities in excess of Five Hundred Thousand and no/100 Dollars($500,000.00) in the aggregate to all of the foregoing at any one time.7.12 Additional Negative Covenants.Not to, without the Bank’s written consent:(a) Enter into any consolidation, merger, or other combination, or become a partner in apartnership, a member of a joint venture, or a member of a limited liability company.(b) Acquire or purchase a business or all or substantially all of the assets of a business whilethe Loan is outstanding, in an aggregate amount exceeding an amount equal to 25% of theBorrower’s Tangible Net Worth on the date of each such acquisition or purchase after givingeffect to all prior, and the currently planned acquisition or purchase; providedthat, (i) such acquisition or purchase is consensual (and not hostile) to the sellingparty; and (ii) the Borrower, is in compliance with all covenants in this Agreement, and shallbe, on a pro-forma basis, in compliance with all covenants in this Agreement after givingeffect to such acquisition or purchase.(c) Engage in any business activities substantially different from the Borrower’s presentbusiness.(d) Liquidate or dissolve the Borrower’s business.(e) Voluntarily suspend its business for more than ten (10) calendar days in any rolling threehundred and sixty five (365) day period.
 
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7.13 Notices to Bank.To promptly notify the Bank in writing of:(a) Any lawsuit in which the damages claimed exceed Five Million and no/100 Dollars($5,000,000.00) against the Borrower or the disclosure of which would be required in an SECReport.(b) Any material dispute between any governmental authority and the Borrower.(c) An Event of Default under this Agreement, or any event which, with notice or lapse of time orboth, would constitute an Event of Default.(d) Any material adverse change in the Borrower’s business condition (financial or otherwise),operations, properties or prospects, the Collateral, or the Borrower’s ability to repay theLoan.(e) Any change in the Borrower’s name, legal structure, principal, place of business, or itschief executive office.(f) Except as otherwise disclosed in any financial statements of Borrower or in any SEC Report,any actual contingent liabilities of the Borrower in excess of Five Million and no/100 Dollars($5,000,000.00) in the aggregate and, to Borrower’s knowledge, any such contingent liabilitieswhich are reasonably foreseeable, where such liabilities would cause an Event of Default.7.14 Insurance.(a) General Business Insurance. To maintain insurance reasonably satisfactory to theBank as to amount, nature and carrier covering property damage (including loss of use andoccupancy) to any of the Borrower’s properties, business interruption insurance, publicliability insurance including coverage for contractual liability, product liability andworkers’ compensation, and any other insurance which is usual for the Borrower’s business.Each policy shall provide for at least thirty (30) days prior notice to the Bank of anycancellation thereof.(b) Insurance Covering Collateral. To maintain insurance required pursuant to the Deedof Trust. The insurance must be issued by an insurance company reasonably acceptable to theBank and must include a lender’s loss payable endorsement in favor of the Bank in a formacceptable to the Bank.(c) Evidence of Insurance. Upon the request of the Bank, to deliver to the Bank a copyof each insurance policy, or, if permitted by the Bank, a certificate of insurance listing allinsurance in force, and when requested by the Bank, noting the Bank on each such policy as anadditional insured or loss payee, as appropriate.
 
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7.15 Compliance with Laws. To comply with the applicable laws (including any fictitious or trade name statute), regulations,and orders of any government body with authority over the Borrower’s business, except where thefailure to comply would not reasonably be expected to have a material adverse effect on theBorrower or its business.7.16 ERISA Plans.Promptly during each year, to pay and cause any subsidiaries to pay contributions adequate to meetat least the minimum funding standards under ERISA with respect to each and every Plan; file eachannual report required to be filed pursuant to ERISA in connection with each Plan for each year;and notify the Bank within ten (10) calendar days of the occurrence of any Reportable Event thatmight constitute grounds for termination of any capital Plan by the Pension Benefit GuarantyCorporation or for the appointment by the appropriate United States District Court of a trustee toadminister any Plan. “ERISA” means the Employee Retirement Income Security Act of 1974, asamended from time to time. Capitalized terms in this paragraph shall have the meanings definedwithin ERISA.7.17 ERISA Plans — Notices.With respect to a Plan subject to Title IV of ERISA, to give prompt written notice to the Bank of:(a) The occurrence of any reportable event under Section 4043(c) of ERISA for which the PBGCrequires 30-day notice.(b) Any action by the Borrower or any ERISA Affiliate to terminate or withdraw from a Plan or thefiling of any notice of intent to terminate under Section 4041 of ERISA.(c) The commencement of any proceeding with respect to a Plan under Section 4042 of ERISA.7.18 Books and Records.To maintain adequate books and records of its corporate and business activities.7.19 Audits.Except as may be prohibited by applicable laws regarding confidentiality, to allow the Bank and itsagents to inspect the Borrower’s properties and examine, audit, and make copies of books andrecords at any reasonable time. If any of the Borrower’s properties, books or records are in thepossession of a third party, the Borrower authorizes that third party to permit the Bank or itsagents to have access to perform inspections or audits and to respond to the Bank’s requests forinformation concerning such properties, books and records.
 
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7.20 Perfection of Liens.To help the Bank perfect and protect its security interests in and liens on the Collateral, andreimburse it for related costs it incurs to perfect, protect or enforce its security interests inand liens on the Collateral.7.21 Cooperation.To take any action reasonably requested by the Bank to carry out the intent of this Agreement.7.22 Flood and Other Insurance.If any improved real property comprising the Collateral is located in a designated flood hazardarea, or becomes located in a designated flood hazard area after the date of this Agreement as aresult of any re-mapping of flood insurance maps by the Federal Emergency Management Agency, theBorrower will be required to maintain flood insurance on the real property and any other portion ofthe Collateral within such area.7.23 Inspections and Appraisals of Real Property.To allow the Bank and its agents to visit the real property comprising any of the Collateral at anyreasonable time for the purpose of inspecting such property and conducting appraisals thereof, anddeliver to the Bank any financial or other information concerning such property as the Bank mayrequest. So long as there is no Event of Default, Borrower shall not be required to pay for morethan one (1) appraisal each calendar year following the disbursement of the Loan.7.24 Use or Leasing of the Real Property Collateral.(a) To occupy the real property comprising any of the Collateral for the conduct of its regularbusiness. The Borrower will not change its intended use of such real property without theBank’s prior written approval.(b) All leases of any portion of the real property comprising any of the Collateral and spaceswithin such real property may be entered into with bona fide third party tenants, financiallycapable of performing their obligations under the leases, in arms-length transactions at thethen current market rate for comparable space, area or use. All leases in the aggregate shallnot alter the Borrower’s current occupancy, control or use of the Collateral and shall notcover any material part of the real property comprising any of the Collateral. The leasesshall not contain any right to purchase such real property or any present or future interestin any portion of the real property other than the right to use and occupy the premisesdemised. The Borrower will promptly obtain and deliver to the Bank such estoppel certificatesand subordination and attornment agreements from tenants as the Bank from time to time mayrequire provided that so long as there is no Event of Default Borrower shall not be requiredto deliver such certificates more frequently than one (1) time per calendar year. TheBorrower will perform all obligations of landlord under all leases.
 
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7.25 Indemnity Regarding Use of Real Property.To indemnify, defend with counsel acceptable to the Bank, and hold the Bank harmless from andagainst all liabilities, claims, actions, damages, costs and expenses (including all legal fees andexpenses of Bank’s counsel) arising out of or resulting from the construction of any improvementson the real property comprising any of the Collateral, or the ownership, operation, or use of suchreal property collateral, whether such claims are based on theories of derivative liability,comparative negligence or otherwise. The Borrower’s obligations to the Bank under this Sectionshall survive termination of this Agreement and repayment of the Borrower’s obligations to the Bankunder this Agreement, and shall also survive as unsecured obligations after any acquisition by theBank of the real property comprising any of the Collateral or any part of it by foreclosure or anyother means.7.26 Educational Covenants.The following Sections 7.27, 7.28, 7.29, and 7.30 shall becollectively referred to as the “Educational Covenants.” The following definitions shallapply to the Educational Covenants. Any term in the Educational Covenants that is not definedherein shall have the meaning given to them by the DOE or Title IV.“Title IV” shall mean Title IV of the Higher Education Act of 1965, as amended.“Title IV Programs” means the programs of federal student financial assistance administeredpursuant to Title IV.“School” shall mean Grand Canyon University.“Education Law” means any federal, state, local or similar statute, law, ordinance,regulation, rule, code, order, or binding standard issued or administered by, or related to, anyEducation Agency and applicable to private educational institutions.“Education Agency” means any entity or organization, whether governmental, governmentchartered, private, or quasi-private, that engages in granting or withholding Educational Approvalsfor, provides or administers financial assistance to or for students of, or otherwise regulatesprivate schools in accordance with standards relating to the performance, operation, financialcondition or academic standards of such schools, including, without limitation, the DOE, DHS, stateauthorizing or licensing agencies, accrediting bodies, state student aid agencies, state approvingagencies for veterans benefits, and student loan guaranty agencies.“DHS” means the U.S. Department of Homeland Security. “DOE” shall mean the United Stated Department of Education.
 
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7.27 Title IV Accreditation Requirements.Borrower shall ensure that School maintains all customary accreditation requirements under Title IVincluding all licenses, accreditations, certificates, permits, consents, authorizations and othergovernmental, regulatory, or accreditation approvals or exemptions (the “EducationalApprovals”) necessary for the School to conduct its business, including all requisite approvalsor exemptions from the DOE, the State of Arizona, the Higher Learning Commission and any otherEducation Agency. In addition, the Borrower shall ensure that the School maintains its eligibilityas a “proprietary institution of higher education,” as defined in 34 C.F.R. § 6005.5 under TitleIV, and remains party to, and in material compliance with, a valid Program Participation Agreement(provisional or otherwise) with the DOE with respect to the School’s operations. Lastly, theBorrower shall ensure that the School continues to hold a valid Eligibility and CertificationApproval Report (provisional or otherwise) issued by the DOE attesting to its Title IV Programeligibility. Borrower shall also maintain all other academic accreditations (or substitute acommercially reasonable substitute academic accreditation) as the Borrower reasonably determinesare necessary for the School to conduct its business provided that, if the Borrower elects to ceasemaintaining a material academic accreditation without such substitution, then such election ordetermination of the Borrower must be reasonably acceptable to the Bank. Borrower shall give Banknotice within ten (10) business days of any breach of this Section 7.27.7.28 DOE Composite Score Requirement. Borrower shall ensure that School maintains a DOE Composite Score of not less than 1.50 for anyfiscal year. In addition, Borrower shall ensure that School continues to be in materialcompliance with the DOE standards of financial responsibility as set forth at 34 C.F.R. §§ 668.172- 174. In addition, Borrower shall notify Bank if it is required by the DOE to post a letter ofcredit, including a letter of credit due to late funds pursuant to 34 C.F.R. § 668.173.7.29 Long Term Student Receivables Limitation.Borrower shall ensure that School does not allow its Long Term Receivables to Students to exceed anamount equal to ten percent (10%) of the Borrower’s Tangible Net Worth as defined in Section7.5, and calculated on consolidated basis as of the end of each fiscal quarter and each fiscalyear. In addition, Borrower will ensure that the School continues to comply with the statutoryprovision at 20 U.S.C. § 1002(b)(1)(F) requiring that at least ten percent (10%) of its revenuesfor any fiscal year are not derived from Title IV Program funds as required by 34 C.F.R. § 600.5.7.30 Cohort Default Rate.Borrower shall ensure that School does not allow its Cohort default rate to exceed either (i)twenty-five percent (25%) as an annual average for any rolling three (3) fiscal year period endingduring the period of time the Loan remains unpaid; or (ii) forty percent (40%) in any fiscal year.In addition, Borrower shall ensure that School continues to meet the requirements for FederalFamily Education Loan Program loans as published by the DOE; and to the extent the following becomematerial to the Borrower’s financial results, Borrower shall ensure that School meets therequirements for Federal Direct Loan Program loans and Federal Perkins loans**,**as published by theDOE.
 
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**8.** **DEFAULT AND REMEDIES**If any of the following events of default (“Event of Default”) occurs, the Bank may do oneor more of the following: declare the Borrower in default, stop making any additional creditavailable to the Borrower, and require the Borrower to repay its entire debt immediately andwithout prior notice. In addition, if any Event of Default occurs, the Bank shall have all rights,powers and remedies available under any instruments and agreements required by or executed inconnection with this Agreement, as well as all rights and remedies available at law or in equity.If an Event of Default occurs under the paragraph entitled “Bankruptcy,” below, withrespect to the Borrower, then the entire debt outstanding under this Agreement will automaticallybe due immediately.8.1 Failure to Pay.The Borrower fails to make a payment under this Agreement when due, and such failure continues forthree (3) calendar days.8.2 Other Bank Agreements.Any default occurs and is continuing under any other agreement the Borrower has with the Bank witha payment or obligation amount exceeding Fifty Thousand and no/100 Dollars ($50,000.00), if suchdefault continues after giving effect to any applicable cure period.8.3 Cross-default.Any default occurs under any agreement in connection with any credit exceeding One Million andno/100 Dollars ($1,000,000.00) the Borrower or any subsidiary of the Borrower’s has obtained fromanyone else or which the Borrower or any of the Borrower’s subsidiaries has guaranteed, if suchdefault continues after giving effect to any applicable cure period.8.4 False Information.The Borrower has given the Bank materially false or misleading information or representations.8.5 Bankruptcy.The Borrower files a bankruptcy petition; or a bankruptcy petition is filed against the Borrower(and not dismissed within sixty (60) days); or the Borrower makes a general assignment for thebenefit of creditors.8.6 Receivers.A receiver or similar official is appointed for a substantial portion of the Borrower’s businessand such appointment is not terminated within ten (10) calendar days, or the business isterminated.8.7 Lien Priority.The Bank fails to have an enforceable first lien (except for any prior liens to which the Bank hasconsented in writing or are noted in the Title Policy) on or security interest in any of theCollateral as security for the Loan or this Agreement.
 
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8.8 [Intentionally Blank].8.9 Judgments.Any judgments or arbitration awards are entered against the Borrower, or the Borrower enters intoany settlement agreements, in each case with respect to any litigation or arbitration, in anaggregate amount of Five Million and no/100 Dollars ($5,000,000.00) or more in excess of anyinsurance coverage and (i) said judgments are not stayed or bonded over within thirty (30) daysafter entry, or (ii) Borrower does not have sufficient liquidity to satisfy such judgment or award,as determined by the Bank.8.10 Material Adverse Change.A material adverse change occurs in the Borrower’s business condition (financial or otherwise),operations or properties, which could reasonably adversely affect the Borrower’s ability to repaythe Loan including any action by any government authority.8.11 Intentionally Omitted.8.12 Default under Related Documents.Any Event of Default, as defined therein, or a default occurs (and continues beyond any applicablenotice or cure period and which gives the Bank an immediate right to exercise its remedies as aresult thereof), under any guaranty, subordination agreement, security agreement, deed of trust,mortgage, or other document required by or delivered in connection with this Agreement or the Loan,including, without limitation, the Deed of Trust or any other Collateral Document.8.13 ERISA Plans.Any one or more of the following events occurs with respect to a Plan of the Borrower subject toTitle IV of ERISA, provided such event or events could reasonably be expected, in the judgment ofthe Bank, to subject the Borrower to any tax, penalty or liability (or any combination of theforegoing) which, in the aggregate, could have a material adverse effect on the financial conditionof the Borrower:(a) A reportable event shall occur under Section 4043(c) of ERISA with respect to a Plan.(b) Any Plan termination (or commencement of proceedings to terminate a Plan) or the full orpartial withdrawal from a Plan by the Borrower or any ERISA Affiliate.8.14 Educational Covenants.A default occurs under any term or condition of the Educational Covenants and such default, if itis capable of being cured, continues for a period of thirty (30) days.
 
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8.15 Other Breach Under Agreement.A default occurs under any other term or condition of this Agreement not specifically referred toin this Article, including any failure by the Borrower to comply with any financial covenants setforth in this Agreement, whether such failure is evidenced by financial statements delivered to theBank or is otherwise known to the Borrower or the Bank.8.16 Representations and Warranties.Any representation or warranty of the Borrower or any written certification or other materialwritten statement of fact made or deemed made by the Borrower or by a Responsible Officer on behalfof the Borrower, in any other Loan Document, or in any document delivered in connection herewith ortherewith shall be incorrect or misleading in any material respect when made or deemed made.**9.** **ENFORCING THIS AGREEMENT; MISCELLANEOUS**9.1 GAAP.Except as otherwise stated in this Agreement, all financial information provided to the Bank andall financial covenants will be made under generally accepted accounting principles, consistentlyapplied.9.2 Governing Law.This Agreement shall be governed by and construed in accordance with the laws of Arizona. To theextent that the Bank has greater rights or remedies under federal law, whether as a national bankor otherwise, this paragraph shall not be deemed to deprive the Bank of such rights and remedies asmay be available under federal law.9.3 Successors and Assigns.This Agreement is binding on the Borrower’s and the Bank’s successors and assignees. The Borroweragrees that it may not assign this Agreement without the Bank’s prior consent. The Bank may sellparticipations in or assign this Loan, and may exchange information about the Borrower (including,without limitation, any information regarding any hazardous substances) with actual or potentialparticipants or assignees. If a participation is sold or the Loan is assigned, the purchaser willhave the right of set-off against the Borrower.9.4 Dispute Resolution Provision.This paragraph, including the subparagraphs below, is referred to as the “Dispute ResolutionProvision.” This Dispute Resolution Provision is a material inducement for the partiesentering into this agreement.(a) This Dispute Resolution Provision concerns the resolution of any controversies or claimsbetween the parties, whether arising in contract, tort or by statute, including but notlimited to controversies or claims that arise out of or relate to: (i) this Agreement(including any renewals, extensions or modifications); or (ii) any document related to thisagreement (collectively a “Claim”). For the purposes of this Dispute ResolutionProvision only, the term “parties” shall include any parent corporation, subsidiary oraffiliate of the Bank involved in the servicing, management or administration of anyobligation described or evidenced by this Agreement.
 
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(b) At the request of any party to this agreement, any Claim shall be resolved by bindingarbitration in accordance with the Federal Arbitration Act (Title 9, U.S. Code) (the“Act”). The Act will apply even though this Agreement provides that it is governed bythe law of a specified state.(c) Arbitration proceedings will be determined in accordance with the Act, the then-current rulesand procedures for the arbitration of financial services disputes of the American ArbitrationAssociation or any successor thereof (“AAA”), and the terms of this Dispute ResolutionProvision. In the event of any inconsistency, the terms of this Dispute Resolution Provisionshall control. If AAA is unwilling or unable to (i) serve as the provider of arbitration or(ii) enforce any provision of this arbitration clause, the Bank may designate anotherarbitration organization with similar procedures to serve as the provider of arbitration.(d) The arbitration shall be administered by AAA and conducted, unless otherwise required by law,in Phoenix, Arizona. All Claims shall be determined by one arbitrator; however, if Claimsexceed Five Million and no/100 Dollars ($5,000,000.00), upon the request of any party, theClaims shall be decided by three arbitrators. All arbitration hearings shall commence withinninety (90) days of the demand for arbitration and close within ninety (90) days ofcommencement and the award of the arbitrator(s) shall be issued within thirty (30) days of theclose of the hearing. However, the arbitrator(s), upon a showing of good cause, may extendthe commencement of the hearing for up to an additional sixty (60) days. The arbitrator(s)shall provide a concise written statement of reasons for the award. The arbitration award maybe submitted to any court having jurisdiction to be confirmed and have judgment entered andenforced.(e) The arbitrator(s) will give effect to statutes of limitation in determining any Claim and maydismiss the arbitration on the basis that the Claim is barred. For purposes of the applicationof any statutes of limitation, the service on AAA under applicable AAA rules of a notice ofClaim is the equivalent of the filing of a lawsuit. Any dispute concerning this arbitrationprovision or whether a Claim is arbitrable shall be determined by the arbitrator(s), except asset forth at subparagraph (h) of this Dispute Resolution Provision. The arbitrator(s) shallhave the power to award legal fees pursuant to the terms of this Agreement.(f) This paragraph does not limit the right of any party to: (i) exercise self-help remedies,such as but not limited to, setoff; (ii) initiate judicial or non-judicial foreclosure againstany real or personal property collateral; (iii) exercise any judicial or power of sale rights,or (iv) act in a court of law to obtain an interim remedy, such as but not limited to,injunctive relief, writ of possession or appointment of a receiver, or additional orsupplementary remedies.
 
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(g) The filing of a court action is not intended to constitute a waiver of the right of anyparty, including the suing party, thereafter to require submittal of the Claim to arbitration.(h) Any arbitration or trial by a judge of any Claim will take place on an individual basiswithout resort to any form of class or representative action (the “Class ActionWaiver”). Regardless of anything else in this Dispute Resolution Provision, the validityand effect of the Class Action Waiver may be determined only by a court and not by anarbitrator. The parties to this Agreement acknowledge that the Class Action Waiver ismaterial and essential to the arbitration of any disputes between the parties and isnonseverable from the agreement to arbitrate Claims. If the Class Action Waiver is limited,voided or found unenforceable, then the parties’ agreement to arbitrate shall be null and voidwith respect to such proceeding, subject to the right to appeal the limitation or invalidationof the Class Action Waiver. **The Parties acknowledge and agree that under no circumstanceswill a class action be arbitrated.**(i) By agreeing to binding arbitration, the parties irrevocably and voluntarily waive any rightthey may have to a trial by jury in respect of any Claim. Furthermore, without intending inany way to limit this agreement to arbitrate, to the extent any Claim is not arbitrated, theparties irrevocably and voluntarily waive any right they may have to a trial by jury inrespect of such Claim. This waiver of jury trial shall remain in effect even if the ClassAction Waiver is limited, voided or found unenforceable. **WHETHER THE CLAIM IS DECIDED BYARBITRATION OR BY TRIAL BY A JUDGE, THE PARTIES AGREE AND UNDERSTAND THAT THE EFFECT OF THISAGREEMENT IS THAT THEY ARE GIVING UP THE RIGHT TO TRIAL BY JURY TO THE EXTENT PERMITTED BYLAW.**9.5 Severability; Waivers.If any part of this Agreement is not enforceable, the rest of the Agreement may be enforced. TheBank retains all rights, even if it made the Loan after a default. If the Bank waives a default,it may enforce a later default. Any consent or waiver under this Agreement must be in writing.9.6 Attorneys’ Fees.The Borrower shall reimburse the Bank for any reasonable costs and attorneys’ fees incurred by theBank in connection with the enforcement or preservation of any rights or remedies under thisAgreement and any other documents executed in connection with this Agreement, and in connectionwith any amendment, waiver, “workout” or restructuring under this Agreement. In the eventof a lawsuit or arbitration proceeding, the prevailing party is entitled to recover costs andreasonable attorneys’ fees incurred in connection with the lawsuit or arbitration proceeding, asdetermined by the court or arbitrator. In the event that any case is commenced by or against theBorrower under the Bankruptcy Code (Title 11, United States Code) or any similar or successorstatute, the Bank is entitled to recover costs and reasonable attorneys’ fees incurred by the Bankrelated to the preservation, protection, or enforcement of any rights of the Bank in such a case.As used in this paragraph, “attorneys’ fees” includes the allocated costs of the Bank’sin-house counsel.
 
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9.7 Set-Off.(a) In addition to any rights and remedies of the Bank provided by law, upon the occurrence andduring the continuance of any Event of Default under this Agreement, the Bank is authorized,at any time, to set off and apply any and all Deposits of the Borrower held by the Bankagainst any and all Obligations owing to the Bank. The set-off may be made irrespective ofwhether or not the Bank shall have made demand under this Agreement or any guaranty, andalthough such Obligations may be contingent or unmatured or denominated in a currencydifferent from that of the applicable Deposits.(b) The set-off may be made without prior notice to the Borrower or any other party, any suchnotice being waived by the Borrower to the fullest extent permitted by law. The Bank agreespromptly to notify the Borrower after any such set-off and application; provided,however, that the failure to give such notice shall not affect the validity of suchset-off and application.(c) For the purposes of this Section 9.7, “Deposits” means any deposits (generalor special, time or demand, provisional or final, individual or joint) and any instrumentsowned by the Borrower which come into the possession or custody or under the control of theBank. “Obligations” means all obligations, now or hereafter existing, of the Borrowerto the Bank under this Agreement and under any other agreement or instrument executed inconnection with this Agreement.9.8 One Agreement.This Agreement and any related security or other agreements required by this Agreement,collectively:(a) represent the sum of the understandings and agreements between the Bank and the Borrowerconcerning this credit;(b) replace any prior oral or written agreements between the Bank and the Borrower concerningthis credit; and(c) are intended by the Bank and the Borrower as the final, complete and exclusive statement ofthe terms agreed to by them.In the event of any conflict between this Agreement and any other agreements required by thisAgreement, this Agreement will prevail. Any reference in any related document to a “promissorynote” or a “note” executed by the Borrower and dated as of the date of this Agreementshall be deemed to refer to this Agreement, as now in effect or as hereafter amended, renewed, orrestated.9.9 Indemnification.The Borrower will indemnify and hold the Bank harmless from any loss, liability, damages,judgments, and costs of any kind relating to or arising directly or indirectly out of (a) thisAgreement or any document required hereunder, (b) any credit extended or committed by theBank to the Borrower hereunder, and (c) any litigation or proceeding related to or arising out ofthis Agreement, any such document, or any such credit. This indemnity includes but is not limitedto attorneys’ fees (including the allocated cost of in-house counsel). This indemnity extends tothe Bank, its parent, subsidiaries and all of their directors, officers, employees, agents,successors, attorneys, and assigns. This indemnity will survive repayment of the Borrower’sobligations to the Bank. All sums due to the Bank hereunder shall be obligations of the Borrower,due and payable immediately without demand.
 
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9.10 Notices.Unless otherwise provided in this Agreement or in another agreement between the Bank and theBorrower, all notices required under this Agreement shall be personally delivered or sent by firstclass mail, postage prepaid, or by overnight courier, to the addresses on the signature page ofthis Agreement, or sent by facsimile to the fax numbers listed on the signature page, or sent viaelectronic mail (e-mail) with attachments in portable document format (PDF) to the e-mail addresseslisted on the signature page, or to such other addresses as the Bank and the Borrower may specifyfrom time to time in writing. Notices and other communications shall be effective (i) if mailed,upon the earlier of receipt or five (5) days after deposit in the U.S. mail, first class, postageprepaid, (ii) if telecopied, when transmitted, (iii) if hand-delivered, by courier or otherwise(including telegram, lettergram or mailgram), when delivered or (iv) if sent via electronic mail,upon electronic confirmation of delivery and receipt.9.11 Headings.Article and Section headings are for reference only and shall not affect the interpretation ormeaning of any provisions of this Agreement.9.12 Counterparts.This Agreement may be executed in as many counterparts as necessary or convenient, and by thedifferent parties on separate counterparts each of which, when so executed, shall be deemed anoriginal but all such counterparts shall constitute but one and the same Agreement. A copy of anexecuted signature page that is transmitted by facsimile or sent as a PDF file via email shall, forall purposes, be deemed to be an original.9.13 Borrower Information; Reporting to Credit Bureaus.The Borrower authorizes the Bank at any time to verify or check any information given by theBorrower to the Bank, check the Borrower’s credit references, verify employment, and obtain creditreports. The Borrower agrees that the Bank shall have the right at all times to disclose andreport to credit reporting agencies and credit rating agencies such information pertaining to theBorrower and/or all guarantors as is consistent with the Bank’s policies and practices from time totime in effect.[*Remainder of page is intentionally left blank; signature pages follow*]
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed anddelivered by their proper and duly authorized officers as of the day and year first above written.      **GRAND CANYON EDUCATION, INC.,**